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Exchange rates and purchasing power parity should be the same between coun- tries. If it costs $300 to purchase an iPod in United States and 400 Australian dollars in Sydney, then the exchange rate between Australia and the United States should be 4:3. Why might purchasing power parity be different from the exchange rate?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M955481

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